21 July 2010

NHL "cheat" contracts

Taking a (likely brief) break from Sather-Boogaard bashing, I figured I'd instead return to posting a table of numbers.

Wherever you read about the Kovalchuk contract signing/rejection ("Me? Lou Lamoriello? Employing dubious cap management practices to wriggle through loopholes in the CBA that I had a hand in creating? Never!"), there are references abound to some of the other heavily front-loaded, long-term deals handed out in recent years to other players, that tested the NHL's patience before it finally decided to crack down.

Expanding slightly on the analysis at Behind The Net, the table below (click to expand) summarises the salary progression and resulting cap hit for each of the contracts in perhaps the seven most contentious deals. [Source: capgeek.com]

Notes/observations

The "real" part of each contract is highlighted in yellow, the "dead" money/years in orange. I've slightly arbitrarily chosen salaries under $2m to be the "dead" money, though there's clearly some argument as to where to draw that line in some cases - and the numbers would accordingly look somewhat different.

Adjusted cap hit (1) represents the total contract value divided by the number of "real" years

Adjusted cap hit (2) represents only the contract value within the "real" years divided by the same number of years

In both cases, I've shown the annual cap saving made from structuring the contract how it was compared to either paying the same total value within the shorter "real" term (1) or eliminating the "dead" years entirely (2)

It's fairly evident that the Kovalchuk deal is pushing the envelope more than its comparables by a number of measures, though clearly $1m of cap savings for one team may well be of more value in a sense than $3m to another team

Interesting that the Savard deal could be considered as the next most contentious, while acknowledging that the term is shorter than most and whether you regard the $1.5m in Year 5 as "real" or "dead" makes quite a difference in this case

Of course, the Pronger deal is distinguished from the others by it being classed as an "over-35" contract, meaning Pronger will be suspended for over 35 games during the lifetime of the contract the Flyers will be stuck with the cap hit (barring trade) even if Pronger retires before the "dead" years are reached - just as Paul Holmgren intended (ahem)